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Apple v Ebizcuss: the False Jurisdiction Dichotomy Between Brticles 101-102 TFEU in Private Enforcement Claims

In its decision on Apple Sales International v MJA C-595/17 of 24 October 2018, the European Court of Justice (ECJ) sheds new light on the application of jurisdiction clauses in the context of private enforcement based on Article 102 of the Treaty on the Functioning of the European Union (TFEU), leaving the door open to apply the same principle to claims based on Article 101 TFEU.

Background

The Irish supplier Apple Sales International and the French distributor eBizcuss entered into a contract to authorise the latter to resell Apple products in France. Claiming a breach of Article 102 TFEU by Apple, eBizcuss brought proceedings in France in April 2012.

Apple decided to challenge the jurisdiction of the French court as a clause conferring jurisdiction to the Irish courts was contained in the distribution agreement between the two parties. This approach was disputed by Ebizcuss as the clause in question did not refer to disputes relating to antitrust litigation.

After more than five years, two first instance judgments and two decisions from the French Court of Appeal, the French Supreme Court decided to ask for a preliminary ruling from the ECJ as to whether Article 23 of Brussels 1 Regulation (Regulation No 44/2001) on prorogation of jurisdiction “must be interpreted as precluding the application, in the context of an action for damages brought by a distributor against its supplier on the basis of Article 102 TFEU, of a jurisdiction clause, set out in the contract binding the parties, which does not expressly refer to disputes relating to liability incurred as a result of an infringement of competition law”.

The ECJ’s decision

In its decision of October 2018, the ECJ firstly recalled the CDC judgment [1], according to which account should be taken of jurisdiction clauses in the context of Article 101 TFEU claims ”provided that those clauses refer to disputes concerning liability incurred as a result of an infringement of competition law”.

As detailed in the CDC judgment [2], the reason for this conclusion was that the conduct was unknown to the claimant and therefore an abstract clause referring to all disputes arising from the contractual relationship should not apply to a dispute between the parties which is not related to their contractual relationship. Hence, the jurisdiction clause could not bind a party unless there is specific provision referring to that kind of infringement in the agreement.

In Apple v Ebizcuss, the ECJ maintained this approach and held that the application of a jurisdiction clause under an action based on Article 102 TFEU “is not excluded on the sole ground that that clause does not expressly refer to disputes relating to liability incurred as a result of an infringement of competition law”. Paragraph 27 of the decision states that the national court will need to look at whether the infringement has a “connection with the contractual relationship in the context of which the jurisdiction clause was agreed” in order to determine jurisdiction.

Going forward

It is important to note that this principle should not be extended as a general rule of thumb for all infringements of Article 102 TFEU. Each national court should assess, on a case by case basis, whether there is a sufficient connection between the conduct in question and the contractual relationship between the parties. As in the CDC case, the key is to assess whether the competition law infringement finds its source in the contractual relationship between the parties. There are therefore two options:

The conduct is directly linked to the contractual relationship. In that case the jurisdiction clause does not have to expressly specify “competition law infringements” to be applied, and any other court should not have jurisdiction on this matter.

The conduct is not directly linked to the contractual relationship and the clause should therefore expressly refer to antitrust infringements to be applicable.

Furthermore, there is no reason that the same solution would not apply mutadis mutandis to Article 101 TFEU claims as highlighted by Advocate General Wahl in his conclusions on that case [3]. However, the scope is very narrow: there are fewer situations than under Article 102 TFEU where the infringement will have a direct link with the contractual relationship. Some exceptions, such as infringements on resale price maintenance could nonetheless apply to this “principle” [4].

Footnotes

[1] CDC Hydrogen Peroxide, C-352/13, 21 May 2015

[2] Apple Sales International v MJA, C-595/17, 24 October 2018, paragraph 70

[3] Apple Sales International v MJA, C-595/17, 24 October 2018, paragraph 69

[4] Apple Sales International v MJA, C-595/17, 24 October 2018, paragraph 28

Related Lawyers: Antoine Riquier
Related Practice Areas: Antitrust / Competition